Capital Volume 3, Chapter 17: Commercial Profit

In the sphere of circulation capital creates neither value nor surplus-value but carries out the operations of the realisation of the value of commodities, and the transformation of this value back into the elements of production. These operations however require time and in function of this set limits to the formation of value and surplus-value. This applies equally to when industrial capital itself carries out these operations, as to when these functions are appropriated through a division of labour within total capital by merchants’ capital (irrespective of the fact, as we have seen, that commercial capital may be indirectly productive).

Commercial capital, therefore, creates neither value nor surplus-value; rather it simply facilitates their realisation. But, given that the circulation of industrial capital forms as necessary a part of the reproduction process as does production, commercial capital, the capital that functions independently in the circulation process, must, as must all capital, yield an average profit.

If commercial capital were to yield a higher average profit than industrial capital, a part of industrial capital would change into commercial capital. If it yielded a lower average profit, the opposite process would take place. No species of capital finds it easier than commercial capital to change its function and designation.

Hence, since commercial capital does not produce any surplus-value of its own, the surplus-value that accrues to (as average profit) must come from the surplus-value produced by productive capital as a whole. We are going to investigate how this happens. In doing so, we shall first look at commercial profit, disregarding the costs of circulation, and then we shall look at the costs of circulation, which break down into material costs, and social costs, respectively the constant capital advanced by the commercial capitalist, and the variable capital, wages paid to commercial workers.